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China appeals WTO rejection of raw materials curbs

China’s government has appealed a World Trade Organization (WTO) ruling against its curbs on exports of industrial raw materials in a case Washington and Europe hope will lead to an easing of restrictions on rare earths.


September 1, 2011
by CANADIAN PRESS

BEIJING: China’s government has appealed a World Trade Organization (WTO) ruling against its curbs on exports of industrial raw materials in a case Washington and Europe hope will lead to an easing of restrictions on rare earths.

The Chinese Commerce Ministry said it filed the appeal Aug. 31 with the WTO in Geneva.

Ministry spokespeople had no details of the appeal but Chinese officials have defended the restrictions on materials such as zinc and bauxite as needed to protect the environment.

A WTO panel ruled July 5 that Beijing was improperly protecting its companies by limiting exports of nine materials used in the steel, aluminum and chemical industries.
The case did not mention rare earths, a group of 17 minerals used in mobile phones and other high-tech products. But the US and the 27-nation European Union say they want China to apply its principles to rare earths and lift export restrictions.

The WTO ruling in the case brought by the US, the EU and Mexico, applied to Chinese quotas and taxes on exports of materials including coke, bauxite, zinc and fluorspar. It rejected China’s argument that it was trying to protect the environment and said export restrictions should be removed.

China accounts for 97% of rare earths production and has alarmed foreign manufacturers by reducing exports while it tries to develop its own manufacturers of magnets and other products made with the minerals.

China has about 30% of the world’s reserves of rare earths, which also are used in some weapons, flat-screen TVs, batteries for electric cars and wind turbines.

The US, Canada and Australia have rare earths but stopped mining them in the 1990s as lower-cost Chinese ores flooded the market. Companies are developing mines in North America and elsewhere but the Chinese restrictions have pushed up global prices.

Beijing says it restricted exports to conserve scarce supplies and curb environmental damage caused by mining. But foreign governments complain similar limits were not applied to domestic manufacturers that use rare earths.

© 2011 The Canadian Press

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